Candor Opportunities Fund’s IPO closes after netting Rs. 500 m

By Shehana Dain

Candor Asset Management Ltd. has decided to close the Initial Public Offering (IPO) of the Candor Opportunities Fund with the oversubscription of initial amount of Rs. 500 million.

At the close of the IPO, Candor had received 374 applications requesting for units worth Rs. 507 million. 

The IPO offered 50 million units at Rs. 10 each with the option to issue a further 25 million units in the event of an oversubscription of the original amount. The issue, whose full amount was Rs. 750 million, opened on 20 October and was closed yesterday.

The Candor Opportunities Fund is the first listed fund by CAM. The fund will be a five-year close-ended fund which will adopt dynamic asset allocation strategies and invest in both listed shares and fixed income securities depending on the investment climate.

“The strategy is primarily to invest in stocks of well-managed companies that are attractively priced with medium to long-term growth, and income potential with the option to move into fixed income securities at times when the equity market is over-valued,” the issue prospectus said.

The fund aims to invest 97% of its raised capital in equity, with the remaining 3% in fixed income securities, although it could go up to 100% either way. However, it has the option of liquidating equity investments during downturns in the stock exchange.

The strategy of investing both listed shares and fixed income securities is expected to limit any downside risk while capitalising on upward movements in the stock market. While the primary investment objective of the fund is to achieve long-term growth of capital, the fund will also provide annual income to unit holders by way of annual dividends.